Mumbai: The Indian economy has started showing signs of normalcy with ease in lockdown restrictions across the country, RBI Governor Shaktikanta Das said on Saturday.

He added that post containment of COVID-19, a very careful trajectory has to be followed in orderly unwinding of countercyclical regulatory measures.

The financial sector should return to normal functioning without relying on regulatory relaxation as the new norm, he added.

"Indian economy has started showing signs of going back to normalcy after easing of restrictions," Governor Das said at the 7th SBI Banking and Economics Conclave.

While the multi-pronged approach of the Reserve Bank has provided a cushion from the immediate impact of the pandemic on banks, the medium-term outlook is uncertain and depends on the COVID-19 curve, he said.

"Policy action in medium-term would require a careful assessment of how the crisis unfolds," he said, adding that building buffers and raising capital will be crucial not only to ensure credit flows but also to build resilience in the financial system.

The country's banking and financial system is capable of rising to the occasion in meeting this challenge, he asserted.

In these challenging times, banks have to improve their governance and sharpen their risk management, he said.

Banks will also have to raise capital in an anticipatory basis instead of waiting for a situation to arise, Das noted.

The economic impact of the pandemic due to the lockdown and anticipated post-lockdown compression in economic growth may result in higher non-performing assets and capital erosion of the banks, Das cautioned.

A recapitalisation plan for public and private sector banks has therefore become absolutely necessary, he said.

 

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Southampton: Pakistan slumped to 126-5 before a third stoppage for rain led to an end to play on the first day of the second test against England at the Rose Bowl on Thursday.

Abid Ali struck 60 after being dropped twice early in his 111-ball innings and was comfortably Pakistan's top scorer on a tough day for the tourists in changing weather.

Jimmy Anderson was retained for the match, despite struggling in England's three-wicket win in the first test in Manchester last week, and the paceman repaid that faith by removing Shan Masood (1) in the third over and captain Azhar Ali (20) after lunch. It gave England's record wicket-taker figures of 2-35 and he is up to 592 in tests.

After the toss won by Pakistan was made under sunny skies, Pakistan began batting in overcast conditions and a shower brought up an early lunch. More rain came midway through the second session, which the tourists finished on 85-2.

And only about an hour was possible after tea, when Pakistan lost three wickets including Abid, who edged recalled seamer Sam Curran to Rory Burns at second slip.

Burns had been the second slip fielder to drop Abid before lunch, the right-handed opener having already been given a life on 0 by Dom Sibley's drop diving to his left at third slip.

As with Burns, Sibley made amends by taking a smart catch low down to remove Asad Shafiq (5) to give Stuart Broad his first wicket.

That brought Fawad Alam to the crease for his first test innings in 11 years after being recalled and it last four balls, when the left-hander was trapped lbw by Chris Woakes for a duck. A not-out decision was given but England reviewed and Hawk-Eye showed the ball was hitting the top of middle stump.

Babar Azam was 25 not out when bad light eventually led to stumps being called. Mohammad Rizwan was on 4.

Pakistan trails 1-0 in the three-match series. Another victory for England will clinch a first test series against Pakistan in 10 years, and a second series of this pandemic-affected summer having already beaten the West Indies.